GCFA and Wespath Support Church Alliance Amicus Brief

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Friday, April 27, 2018

Nashville, TN / Glenview, IL—The Church Alliance filed an amicus curiae brief in the Seventh Circuit U.S. Court of Appeals (Chicago) in the case challenging the constitutionality of the cash housing allowance exclusion for clergy. Wespath Benefits and Investments (Wespath) is a member of the Church Alliance, and the General Council on Finance and Administration (GCFA) joined the brief as an additional amicus.

The clergy housing allowance, commonly called “clergy housing exclusion,” stems from Internal Revenue Code Section §107(2). This Code Section excludes the value of clergy-owned housing from income taxation.

In the case Annie Laurie Gaylor, Freedom From Religion Foundation et al v. Steve Mnuchin et al., the federal district court for the Western District of Wisconsin declared the tax-free housing allowance for clergy under Code §107(2) unconstitutional. On December 13, 2017, the district court entered its final order in the case, which directs the government to cease enforcing Code §107(2). However, the district court delayed the effect of the order until 180 days after the conclusion of all appeals. The government appealed to the Seventh Circuit in February.

“Wespath is committed to protecting the benefits of our participants. That’s why we are working with the Church Alliance, GCFA and other religious organizations to protect the compensation, retirement and housing of clergy across denominations,” said Barbara Boigegrain, chief executive of Wespath Benefits and Investments and chair of the Church Alliance. “If the clergy housing exclusion is ruled unconstitutional, clergy will find their financial well-being at risk, ultimately jeopardizing their retirement security.”

The brief adds a perspective that is not duplicated in the government’s brief, focusing on the jurisprudential history of permitted legislative accommodations of religion. The brief argues that Code §107(2) is a constitutionally permitted accommodation of religion when viewed in the context of Code §107(1) (the exclusion for in-kind clergy housing, e.g., parsonage or manse) and Code §119, which excludes employer-provided housing from employees’ incomes in numerous secular circumstances.  In addition, the Church Alliance brief brings to the court’s attention the particularly strong reliance interests that would render a change in the law on this point inappropriate and unjust.

Moses Kumar, chief executive of the General Council on Finance and Administration, said, “One of GCFA’s primary responsibilities is to protect the legal rights and interests of The United Methodist Church, inclusive of its clergy.  The rights and interests of United Methodist clergy are of critical importance if, together, we ‘make disciples of Jesus Christ for the transformation of the world.’”

The Church Alliance is a coalition of the chief executive officers of 38 denominational benefit programs. It includes mainline and evangelical Protestant denominations, two branches of Judaism and Catholic dioceses, schools and institutions. The benefit programs provide retirement and health benefits to more than 1 million clergy, lay workers, and their family members. In addition to the 38 members of the Church Alliance and GCFA, a broad ecumenical array of other religious organizations joined the brief, including the U.S. Conference of Catholic Bishops, The Church of Jesus Christ of Latter Day Saints, the Salvation Army, the Southern Baptist Ethics and Religious Liberty Commission, and numerous organizations affiliated with the Jewish Conservative Movement or the Jewish Reform Movement.

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